Courtesy of John Nyaradi.
Major market indice ETFs slumped today on the FOMC announcement that Fed Policy will NOT change for now.
Dr. Ben Bernanke and his Federal Reserve team announced today at the FOMC meeting that the Fed’s current policies, which includes 0% to 0.25% interest rates and no bond buying or quantitative easing, would not change due to a growing US economy.
Markets did not like the news of no free money, as the S&P 500 (NYSEARCA:SPY) dropped 0.91%, the Dow (NYSEARCA:DIA) dropped 0.61%, and the NASDAQ (NASDAQ:QQQ) dropped 1.10%.
The Fed’s decision comes at a dire time in markets and the global economy as investors fear a European contagion and economic retraction, all the while fearing that any negative spark in Europe could derail the US economy’s slow and delicate growth.
Today was not all doom and gloom, however, as today’s Retail Sales report was improved in November, alongside rises in US Treasuries (NYSEARCA:TLT) and US Dollars (NYSEARCA:UUP).
Bottom Line: Today’s markets were desperately looking for more free money and guidance from our Central Bank, especially because the Europeans are still arguing over what to do next. Despite our anticipated “Santa Rally” and “resolved” European situation last week, today’s environment remains extremely volatile.
And, sadly, Dr. Ben did not wear his Santa Hat.
Have a great evening!
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